ASPs to grow ... eventually

ASPs to grow ... eventually

Despite the ongoing uncertainty in the current application service provider market, ASPs are set to grow substantially over the next five years, according to a recent study by analyst and consulting company Ovum.

Ovum figures peg revenues from ASP solutions to reach $49 million by 2006 as businesses begin to understand the benefits of using a provider for application software over a network. The company predicts revenues will actually grow in the current downturn, as companies look to reduce the outlays associated with new systems.

Network operators are in an advantageous position to make the most of market opportunities, according to Ovum.

"Operators are entering the ASP market, both as suppliers of enabling services to ASPs, and as suppliers of ASP services direct to end customers," said Ovum senior analyst John Delaney.

Delaney went as far as to warn operators that they may be facing a greater risk by not moving into ASP services than by offering them. He did, however, acknowledge there would be rocky times ahead.

"ASP services promise major revenue opportunities, but ASPs first need to ride out some lean times," he said. "The companies that are best placed to gain the large ASP revenues that will eventually materialise are those that have the scale and resources to sustain the current period of slow-to-modest growth."

How to get ahead

* provide ASP services to end customers.

* provide ASP services on a wholesales basis to other service providers.

* provide transport, connectivity and other enabling services to ASPs.

* aggregate multiple ASP services to a single access point for end users.

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